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Oct 07

Decent labor report = “bad news”

This morning’s non-farm payroll report might have noted the weakest gain since April 2021 but there’s not enough damage in the labor market yet to cause the Fed to “pause”.  +263k new jobs was in line with market expectations. Another +75bps hike in Fed funds rates in early November is now... read more →
Oct 06

A great start; need more

We talk a lot about breadth because ‘participation’ to the upside is vital for a sustained move higher. We want to see the majority of troops following the general! Additionally, the start of new bull markets are marked by breadth thrusts. These thrusts are indications that the market has moved... read more →
Oct 05

Labor market weakening up…right on cue

Yesterday’s job openings (JOLTs) data notes a weakening in the labor market. Tighter financial conditions clearly starting to impact labor demand. Job openings fell by -1.1m openings, the single largest monthly decline since before the pandemic. The importance of this to the markets is that this data is both important and closely... read more →
Oct 04
Sep 30

Not all recessions are created equal

As we have discussed in prior communications, the Fed has been aggressively hiking interest rates in order to slow down the economy and get inflation under control, and it is making no mystery of the fact that it is willing to cause a recession if that is what it takes.... read more →
Sep 29

Q3 Earnings fast approaching

Another quarter is soon drawing to a close and investors will once again turn their focus to the latest corporate results. With the next round of news on inflation and the Federal Reserve still a few weeks away, earnings announcements will take center stage and help to shed light on... read more →
Sep 26

Labor weakness is next

Fed chair Powell’s folly continues.  It’s quite the body of work. First problem was doing nothing in 1Q22 as inflation was rising and the Fed kept money printing/bond buying. Second problem was initiating rate hikes too little and too slow in 2Q. Now the problem is Powell talking tough and raising rates while... read more →
Sep 22
Sep 20

Quantitative tightening on all fronts

As markets brace for the Fed’s rate decision tomorrow 2pm EST (+75bps overwhelming consensus…it’s already priced in and known), economic demand continues to be destroyed and inflation expectations are falling. Gold down -18% over past 8 months, lumber prices down -65% over past 8 months, shipping freight rates down -52% over... read more →
Sep 16

Recession odds keep rising

The economic data released over the last couple of months has painted a picture of an economy that is holding up fairly well, all things considered. Surveys of manufacturing and service activity halted their declines that started last year, and remain at levels consistent with economic expansion. Hundreds of thousands... read more →